In real terms, Myanmar’s construction industry registered positive growth during the review period (2012–2016). Despite a slowdown in growth during 2015–2016 due to political instability, the industry was supported by public sector investments in infrastructure and residential construction projects.

Over the forecast period (2017–2021), industry growth is expected to slow due to the prevalence of regulatory issues following the government’s transition from military rule to democracy in November 2015.

Construction industry activity is expected to be supported by government efforts to stimulate economic growth through large scale investments in infrastructure. Implementation of government flagship programs such as the National Export Strategy (NES) and the Myanmar Energy Master Plan are also expected to support the industry’s growth over the forecast period.

The industry’s output value in real terms is expected to record a compound annual growth rate (CAGR) of 4.56% over the forecast period, compared to 10.33% during the review period.

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Key Highlights

In 2016, Myanmar experienced a drastic shift in its political scene, with a new democratic government coming into power after years of military rule. With an aim to support the government in establishing a regulatory framework to revamp economic growth, in March 2017 the ADB approved a new Country Partnership Strategy 2017–2021. This strategy aims to establish efficient connectivity among the rural and urban areas, and also address the rising demand for energy in the country. This is expected to drive investments in transport and energy infrastructure projects over the forecast period.

In a bid to address the growing passenger volumes in the country’s airports, in February 2016 the Department of Civil Aviation signed a framework agreement with a consortium consisting of JGC Corporation, Changi Airports International and Yongnam Holdings Ltd to develop Hanthawaddy International Airport near the Bago region. With an estimated investment of MMK1.8 trillion (US$1.5 billion), the new airport and its related infrastructure will be constructed on a 3,642.0ha area.

In 2014, the government, in partnership with the World Bank, launched the National Electrification Plan. This plan aims to provide an electricity connection to every household in the country by 2030. By 2020, the government plans to create 1.7 million new household electricity connections with investments worth MMK1.0 trillion (US$700.0 million).

In January 2016, the government announced plans to develop a deepwater port in the Kyaukpyu special economic zone. The project involves a total investment of MMK6.6 trillion (US$5.4 billion) and includes the construction of two terminals and ten 4.1km-long berths.

With an aim to accelerate the flow of foreign direct investment (FDI), the government introduced a new investment law in March 2017. With effect from April 2017, the government eased restrictions on both domestic and foreign investments, thereby opening economic sectors to private investment. This is also expected to drive more FDI into construction projects in the coming years.